Duolingo Q3 2026 Earnings

Duolingo Inc. (DUOL) on Nov. 3 reported third-quarter results showing accelerating user growth that led management to raise full-year bookings, revenue, and adjusted EBITDA guidance while warning that Q4 gross margin will narrow as AI-based Video Call expands.

User Growth and Quarterly Results

In a shareholder letter and Form 8-K posted Nov. 3, Duolingo reported daily active users reached 64.9 million, up 29% year over year and accelerating from 23% growth in Q2. Growth accelerated in eight of the company’s 10 largest countries. Paid subscribers rose 14% to 13.1 million.

Bookings totaled $316.1 million, about 12% higher year over year and above the prior forecast of roughly $307 million. Revenue was $309.0 million, up 13.7%, and adjusted EBITDA reached $78.7 million, a 25.5% margin that exceeded analyst estimates.

GAAP net income was $27.2 million, down from $292.2 million a year earlier when the company recorded a one-time $222.7 million tax benefit. The company’s Form 10-Q, accepted by the SEC at 6:01 p.m. ET on Nov. 3, showed GAAP earnings per share of $0.54, below analyst estimates of $0.56 to $0.57. Free cash flow was $75.3 million, with a 24.4% margin. Operating margin narrowed to 7.8% from 12.9% a year earlier.

Guidance and Margin Outlook

Duolingo raised its full-year 2026 guidance, projecting bookings of $1.296 billion, revenue of $1.221 billion, and adjusted EBITDA of $323 million, representing a 26.5% margin. The adjusted EBITDA figure was $3 million above prior guidance and $21 million above the midpoint of the original outlook.

For Q4, the company forecast bookings of $382 million, revenue of $322 million, and adjusted EBITDA of $84 million, implying a 26.1% margin and roughly flat year-over-year profitability. Management expects daily active-user growth in Q4 to remain near the Q3 rate. It projects Q4 gross margin of 72.0%, down about 90 basis points sequentially as AI-based features, including Video Call, expand.

Operating expenses are expected to grow faster than revenue in Q4 due to continued product investment and the inclusion of a second portion of a bonus accrual. The Q3 results included an $11 million bonus accrual tied to renewed user growth; the second portion is included in Q4 guidance with payment expected in early 2027.

The outlook assumes foreign-exchange rates as of Oct. 30, 2026. On a constant-currency basis, Duolingo estimates Q4 bookings growth of 14% and revenue growth of 13%.

Following the results, analysts revised ratings and price targets. One firm raised its target from $145 to $165 while maintaining a Buy rating. Another upgraded Duolingo from Underweight to Equal-Weight and lifted its target from $80 to $120.

Management plans to provide its full 2027 outlook in February.